UTRECHT, The Netherlands — Rabobank’s recently published report regarding African Swine Fever (ASF) stated production losses will be greater than initial estimates. Rabobank expects Chinese pork production to have 25 to 35 percent losses. Extreme losses of more than 50 percent are only limited to confined areas.

In its report, Rabobank also said sizeable breeding herd losses will delay the Chinese pork industry’s recovery and the rebuilding efforts will be further complicated by the risk of recontamination even with available financial resources.

Due to ASF, Vietnam is now expecting production losses of 10 percent. The disease also entered Cambodia and could move further into Southeast Asia.  

“The shift in global trade patterns to meet animal protein demand will be highly dynamic,” Rabobank said. “This will create opportunities for those companies with an exportable surplus and access to China and Southeast Asia. It will also create logistical inefficiencies and raise costs through the entire supply chain.”

African Swine Fever now affects an estimated 150 million to 200 million pigs worldwide. That would be equivalent of 30 percent greater than the annual US pork production and all of the pork supply in Europe.

Rabobank said that losses cannot easily be replaced by other proteins such as chicken, duck, seafood, beef or sheepmeat.

“Inaccurate reports of Chinese herd liquidation and an early regional supply imbalance were disruptive to initial price discovery, obscuring the impact of production losses,” the report said. “As the government eased restrictions on the movement of animals (and pork), regional prices converged, but moved higher along with the herd loss. With the full magnitude of herd losses quantified, global protein customers are scrambling to secure long-term protein supplies.”

With the impending pork shortage, Rabobank expects global protein supplies to be redirected to China in an effort to satisfy the growing protein deficit.

“This unprecedented shift in trade will likely create unexpected product shortfalls in markets previously served by these suppliers, creating short-term market volatility that will ultimately result in higher global protein prices,” Rabobank said. “A secular shift towards lower Chinese pork consumption will support increased demand for poultry, beef, seafood, and alternative proteins that will shape global production trends.”

Finally, the group said that companies with an exportable surplus could benefit from the impact of ASF. The US, European Union and Brazil look like the best options to respond to increased import demand for pork and other animal proteins in Asia. Rabobank did warn the current trade restrictions and tariffs on US pork exports to China restrict American companies.  

Earlier this week, The National Pork Producers Council (NPPC) canceled the World Pork Expo 2019 due to concerns over African Swine Fever.

The World Organization for Animal Health (OIE) recently confirmed the first outbreak of African Swine Fever in the Tibet Autonomous Region. According to the OIE, China’s Ministry of Agriculture and Rural Affairs (MARA) has reported 118 ASF outbreaks detected across 28 provinces, autonomous regions and municipalities since the agency confirmed the country’s first-ever ASF outbreak in Liaoning Province on Aug. 3, 2018. Approximately 1 million pigs have been culled in an effort to halt further disease spread, OIE said.

Cases of ASF also have been reported across eastern Europe and Belgium.